#1 The Crash of 2008 - HyperDEflation

[AroundSun]

Personally, I think that the actions of both the Federal Reserve and Congress in the current crisis have been hurtful. Certainly these policies can create a short term boost to the economy like we are currently seeing, but I don't think that they are sustainable policies in the long run. Eventually the Congress has to cut spending or raise taxes, and the Fed has to raise interest rates or risk inflation. At that point the unsustainability of what we are doing will be revealed.

[orangecountytaxdebtr]

I am delighted I!

[SilverRose09]

Where do you see the real estate heading on the inflationary period? up or down or depends on the area?

[Crashof2008]

I recommend you watch all of my videos in their entirety, read the Financial TImes of London, AVOID US media at all costs.

Inflation is dead for a generation. That means 25 years.

[JohnnyLion66]

Matt,

You are dead on! I like what you have to say a lot. Here are some of my ideas....

All of the previous demand has been propped up by credit...credit markets freeze....now we have deflation because our wages don't support our chosen standard of living.

Like I was saying, if Obama doesn't want to regulate the banks, deflation will regulate the banks.

[SilverRose09]

SilverRose09 (1 second ago) Spam Marked as spam Thank you for your respond. For how many months do you thing we need to have solvency reseved for the near crash? I mean to pay for our everyday basics living (mortage, bills, food, etc) and what is the best method for the solvency cash or metals?

[Crashof2008]

Hi Silver Rose, I won't makes specific investment recommendations because I let my Series 7 lapse to pursue other things.

However, my other videos and comments on my home page should provide my general macro perspectives that can feed forward into inferences about allocations.

In terms of how much to have on hand, saved, up, I think 5 years is rational.

[gete0]

Great job on the info ... Thank you!...

[AirelonTrading]

Massive deflation is upon us, facing a further deflationary trap.

You called it Matt, back here at March of 2008

[Crashof2008]

Thanks Airelon. I'll be putting up some new videos soon with my forecasts until July 2010.

In the meantime, feel free to join the discussion on the left hand portion of my youtube home channel!

Matt

[smilingzebra]

hope your film makes it into sundance. Click on my name for a fun music video about the economic collapse of 2008 - posted on Oct. 29, 2008 for symbolic purposes!

[dailygloomanddoom]

With companies like FedEx already implementing pay cuts, deflation is a real threat. How will inflation mix with deflation when the time comes for tax-payers to pay for all the bailouts? More doom and gloom to come.

[Crashof2008]

Yes, we are entering a period of competitive wage deflation. This is not inflationary.

You are correct in pointing out that the taxpayer will have to pay for so much of this and NOT the Federal Reserve.

But since when are higher taxes inflationary?

They reduce consumer spending and contribute to lowered demand.

Increased taxes lead to reduced demand and are therefore deflationary in their bias.

[marky1333]

Percentage falls are deceptive because prices can never fall more than 100%, so you need to reverse it to get the real picture.

Paper was £50 a tonne four weeks ago today it's 85 pence!! the percentage fall is 98.3%

If you reverse it, the percentage gain needed to take 85 pence to £50 is 5800%

So a tonne of paper has really fell 5800% in the last four weeks.

If you apply that to all commodities the percentage falls are much larger than they appear

That looks like hyper deflation too me

[marky1333]

The best video ive seen on the crisis by a mile

[justmks]

Wow, you're monitor's refresh rate is wicked slow. j/k. Great video.

[Aiursrage2k]

Haza you nailed it

[KhmerD0g]

damn, u r good.

u hit on the nail.

[pjblabla]

I am a finance newbie - but very keen to learn the fundamentals forces of capital markets.

I saw these videos in march - understood a little bit.

Now, after the crash of October 2008 - U return to try and understand these videos better.

ARE YOU PLEASE ABLE TO PROVIDE REFERENCES READING MATERIAL ABOUT CAPITAL MARKETS etc.?

[doodooswirl]

Welp, this guy was right. As of today the Dow took a huge shit, and won't stop until we're all standing in lines waiting for soup like back in the 30's. I'm gonna buy him a beer with the change i'll panhandle..

[TYX91101]

Unemployment was about 25% during the Great Depression. Anybody with any initiative had a job. The soup lines were mostly in the big cities of the North. Mobility and an absence of debt will allow you plenty of options to find employment.

[Crashof2008]

If people are forced to flee as refugees from the place where their forefathers were born is that always completely positive without exception?

You speak of "mobility" in such glowing terms. Are family, community and friends always trivial, without exception?

[biosinigrate]

Good job in the foresight in regards to the tax payers getting the bill.

[bushisacoxucker]

The Bush Administration will be remembered for generations as the 8 long years of retrocess.

[dellsprospects22]

lol..global market call..

[erby1kabogey]

Ah capitalism is so cute when she destroys peoples lives! Makes the rich richer and the middle class lust to become the elite and no one really gives a fuck about the worst hit of it all, the poor! Oh America the bloodshed and corruption will inevitable bring it all crumbling down! Every "great" civilization fell and she will be no exception if things carry on! Oh wait the football game is on, nevermind!

[OUTOFGAS88]

my friend your a poet and don't even know it.

[Crashof2008]

My videos in this series on youtube "ENDGAME: WHAT HAPPENS WHEN THE FED RAISES INTEREST RATES" directly addresses this question.

Thanks for the nice comments.

Mr. Fed

[sykes37]

Good series of videos, this work is much appreciated, thank you.

What role do you see from foreign dollar holders in regards to inflation? Is their any risk of hyperinflation if the foreign banks start dumping out of the dollar? Is this occurrence even a remote risk?

We have been exporting a lot of dollars in recent decades, yes? With huge deficits, and a credit meltdown, the dollar could get real unattractive for foreign banks to continue storing in their reserves, couldn't it?

[trustworthyteen]

I have a question: When and if a crash occurs will credit borrowers still be responsible for paying back the loaners after the crash when and if it ends? What has happened in past crashes?

[Crashof2008]

That's a very broad question. It depends on the terms of the contract reflected in the various loan agreements.

There are different levels of rights and protections in bankruptcy. Generally however, the bondholders (creditors) get first call on what assets are left and the shareholders (owners of stock) are very last in line.

That is the general rule.

[tk421missing]

Don't the contingent liabilities create TBTF (too big to fail) institutions. In saving the TBTF's the government has to pump massive amounts of money into the banking system. Won't all this newly created money cause hyperinflation not deflation?

[Crashof2008]

Nope. Review other videos in the series, especially my videos: "Endgame: When the Fed RAISES Rates".

Learn how a Treasury auction is actually an AUCTION. If there are no bids, none are sold!

Matt

[mrzack888]

Privatize the gains and

Socialize the Losses

GREAT quote.

[vancouverbluz]

Capitalism FAILED!

[ypaid]

Is this related to China, the biggest treasury bills holder? Fed can choose either super-inflation or super-deflation, but they choose the latter cuz China is dumping the T-bills.

[jdcremin]

Good video. We obviously are not in deflation yet - the USDX continues to fall and estimated M3 continues to rise - I'm an amateur here but those two facts seem to go against your argument. Perhaps it will be a quick reversal: inflation to deflation?

[kaylasergioliz]

what is going to happen to the mid-class?????

[godfather89]

LoL, what middle class, did you not here him? You'll need to pay very high taxes, only the very rich will survive and the rest of us will be made in feudal slaves to big wigs...

[BrightAnarchist]

FINALLY! Someone who understands that a DEFLATIONARY crash is the most likely. Welcome to the 0.01% club of deflationists.

I took all my cash out of BoA and bought treasury bills. Do you think they'll be safe or do you think that even treasury securities will be included in the deflationary blowout?

[Crashof2008]

Welcome aboard!

As you can see the raging bull market in Treasuries indicates market sentiment believes they are safe.

It's the Fed's job to keep it that way.

[slobomotion]

The fifth largest pension fund in the world is the government of Viet Nam, and for some time now, they have invested in NO U.S. government securities. I called the crash of '87 and have no position in U.S. government securities of any kind that I know of. I am almost fully out of the dollar. Greetings from France, and I would appreciate knowing more on recent U.S. government swaps of dollars for euros.

[m7steel]

The elite are not free market fundamentalists. As the Mr. Fed explained, the U.S. financial system socializes the costs but privatizes the gains. Information market participants use to make decisions are occluded by government and central bank financial intervention on behalf of the elite, which encourages malinvestment and leads market 'dislocations'. BTW, there sould be plenty of affordable houses on the market w/in the next year or two if the 'elite' let the market operate w/o intervening.

[dayoflords]

Thx i think i understand now the reason for me asking is that i have just come into 20000k and have no debts to pay off but am not too sure what to do with it, perhaps buy shares or commodities if hyperdeflation was to happen then i would be better leaving it in a 6.5% savings account or is there still money to be made?

[dayoflords]

perhaps im asking a stupid question but how is negative inflation possible and has it ever happened before?

i can fully understand hyperinflation but how can cash become worth more is it due to tax payers bailing out banks. i just cant get my head round it.

[Crashof2008]

Thanks for your honesty. Apparently I invented the word hyperdeflation, as described in the video and in my initial letter to the FT a while back.

Think of this thought experiment. In the depths of the depression in 1932, the price of everything was far lower than it had been in 1929.

Cash was king!

Just one problem.

Nobody had any cash.

Try to understand the concept. Look at how house prices are falling and how that causes consumers to spend less, meaning less consumer demand.

[yogiudo]

I believe it is more then simply price "deflation". Some prices are going to rise. Things like food, OIL, gold, weapons and other basics. Those items will experience "hyperinflation" pressures.

[sbmillionair]

hm nvm as usual i assumed before watching the video. sorry about that.

[sbmillionair]

I've been watching a lot of videos like this, some are saying hyperINflation, some say hyperdeflation. But both ending up with an economic crash.

[finefilth]

all according to plan... this was mathematically inevitable

[joshrain1]

is this just the financial sector? what about food, techs...will they go out of business, will people loose their jobs in that sector as well? whats your take on it?

[captcaveman4201]

there is an equation that we are following. all that you need to be following it, is to have 1 constant. And then the program is off and running. The 1 constant is USE OF CURRENCY.

[catman2409]

I agree this is a engineered crisis. It got out of hand. I think it is engineered to break the american econony & force,notice i say force the adoption of NAFTA trade agreements and the combining of Canada mexico and the U.S GNP and make a Amero like the Euro. They learned from Great Brittan that if they didnt join, the English economy was stronger than the euro and made stumbling blocks to the union there. With a weak U.S.economy the issuing of the amero will look as way out & NAFTA next step

[MaverickCentricity]

My question is how will the Federal Reserve react to this collapse of the banking system. Will they try to maintain the money supply by printing new money to replace destroyed?

[osnap757]

What bank is next?

[geniusloch]

Matt,

I'm working on crashing the Art Market, and for good reason. I feel it's the weakest link of all markets. The university and museum institutions are at fault for dumbing down and hyperinflating the market. They have valued the art object as if it was a barrel of oil, and that was and is a mistake. I'm working on an online school and museum, for people to get on board. I hope I have better luck than Noah did. Cheers!!!

[SolitonPL]

This is engineered crisis!